The Short Answer
Most people assume you need a lump sum upfront to hire a bankruptcy attorney — you don't. At Duncan Law, we allow you to set up a payment plan at your own pace and your own amount. One important distinction: Chapter 7 attorney fees generally must be paid in full before your case is filed, while Chapter 13 allows a portion to be paid through the repayment plan itself. Once you decide to file, you can typically stop paying unsecured debts like credit cards and medical bills, freeing up income to cover your legal fees.
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Understandably, this is one of the most common questions we get and it’s a good one! With the economy being in such a downturn, this is often one of the first questions asked, and for many, it’s the most important. “If I can’t pay my bills, how can I afford to pay you?” Simply put, many firms, along with ours, allow you to set up your own easy payment plan. You choose the amount that you wish to pay and you pay at your own pace, making a difficult time less stressful and more convenient for you. Also keep in mind, once you’ve met with an attorney and have made the decision to file bankruptcy, you may be able to stop making payments on most of your unsecured debt like credit cards, some personal loans and medical bills. By not making these payments it will free up some of your income which can then be used to help pay for your bankruptcy fees.
Depending on where you file, the Court may require that your attorney fees be paid in full before your bankruptcy can be filed. The reasoning makes some sense. The courts look at it as your attorney is the person who is supposed to help you wipe out your debts. However, if the attorney isn’t paid up front – then you will owe them as well. Their motivation to help you wipe out your debts is probably gone when it means the attorney wouldn’t be paid. Therefore, the courts have said that the attorneys fees in Chapter 7 bankruptcies must be paid before the case is filed.
On the other hand, if you are having to file a Chapter 13 bankruptcy the courts will allow the attorneys to collect only a portion of the fees and have the remainder of the attorneys fees paid in the Chapter 13 bankruptcy plan. This will help lower the initial burden of trying paying all of the fees up front.
It is important to remember that even though a payment plan may be available to you allowing you to pay at your own pace, some individuals may be facing other deadlines. Each individual bankruptcy is different. There may be certain circumstances that prevent you from taking your time to pay (and file). If you have a foreclosure sale date, a pending repossession, or a pending judgment/writ of execution, you most likely will not have the extra time to leisurely pay. You may have no choice but to get your bankruptcy filed before a specific deadline, and in that case, you will have to pay in full in order to enact the bankruptcy stay so it protects you and your assets.
Key Takeaways
- Most bankruptcy firms, including Duncan Law, offer flexible payment plans so you don't need the full fee upfront before you even start.
- Chapter 7 attorney fees must be paid in full before the case is filed — the court requires it to avoid the attorney becoming just another creditor.
- Chapter 13 cases allow attorneys to collect a partial fee upfront and receive the remainder through your court-approved repayment plan.
- Once you've decided to file, you can usually stop making payments on unsecured debts like credit cards, personal loans, and medical bills — and redirect that money toward your legal fees.
- If you're facing a foreclosure sale date, a repossession, or a judgment with a writ of execution, you may not have time for a gradual payment plan and will need to pay in full quickly.
- Filing your bankruptcy case triggers the automatic stay, which halts most collection actions — but the case must actually be filed for that protection to take effect.
Attorney Insight
The mistake I see most often is people waiting so long to call us — because they assume they can't afford to — that they're now facing a foreclosure sale date or a repossession in 48 hours. At that point, the payment plan option is gone; they need the full fee immediately to get the case filed and trigger the automatic stay in time. If you'd called two months earlier, we could have worked out something comfortable. Waiting because you're worried about cost is often what makes the cost harder to manage.
